Yearly Archives: 2015

Amendment to Share Capital and Debentures Rules

Posted on April 3, 2015 | 3 comments

Ministry of Corporate Affairs recently introduced amendment to the Companies (Share Capital and Debentures) Amendment Rules 2015.

These Amendments shall come into force on publication on official gazette i.e.

Application of these Rules:

Rule 3 related to applicability of these rules have been substituted as under:

The provisions of these rules shall apply to –

(a) all unlisted public companies:

(b) all private companies: and

(c) listed companies so far as they do not contradict or conflict with any other regulation framed in this regard by the Securities and Exchange Board of India.

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Posted in Chapter IV - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

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MCA introduces Limited Purpose Independent Director in private companies

Posted on April 1, 2015 | 7 comments

An amendment rules notified by MCA introduces concept of limited purpose independent director in private companies. Government is amending existing Companies (Corporate Social Responsibility Policy) Rules, 2014. These rules are being criticised by various eminent jurist for trying to undermine authority of Section 135 of the Companies Act, 2013. Sub – Section (1) of Section 135 mandate for at least one independent director in every company whether it is private or public company. Existing Rule 5 of CSR rules tries to undermine this provision of Section 135 by saying “an unlisted public company or a private company covered under sub-section (1) of section 135 which is not required to appoint an independent director pursuant to sub-section (4) of section 149 of the Act, shall have its CSR Committee without such director”. A rule being subordinate legislation has no constitutional authority to change a provision of the Act.

Amended Clause (i) of Sub – Rule (1) of Rule 5 reads, “an unlisted public company or a private company covered under sub-section (1) of section 135 shall have an independent director for being member of its CSR Committee and such independent director shall have no other duty, obligation and responsibility under the Act.” Consequently, Clause (i) of Sub – Rule (1) of Rule 5 also been deleted.

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Posted in Chapter XI - CA2013, Companies Act 2013, CSR, Governance and Responsibility, Prank

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Circular: Deposits under earlier Act

Posted on March 31, 2015 | 3 comments

“Ease of doing business” certainly is a joke invoked once again by the Government on eve of closing of financial year 2014 – 15. Even a fast track professional cannot study implication and advice companies about. This became bigger prank when it is meant to give relief to private companies with lesser resources. As one senior company secretary comments, “This clarification is being given on 30th March, 2015 when many companies have either repaid or have filed petitions with the CLB for extension of time to repay the deposits”. Another professional summarise it as “too little, too late”.

Before reading this well intended circulars, circumstance show this now may help intentional defaulters as law abiding corporate already following some process with almost no scope of reversibility.

Now we may read the general circular 05/2015 issued on 30th March 2015 (afternoon, almost before 36 hours of calendar deadline and just before 12 hours of working deadline).

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Posted in Chapter V - CA2013, Companies Act 2013

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E – Voting Rules 2015

Posted on March 27, 2015 | 9 comments

Indian E – voting Rules were under criticism from various quarters of corporate world since. Their application has been postponed some point of time. Now, the Rule 20 of the Companies (Management and Administration) Rules 2014 has been substituted by the Companies (Management and administration) amendment Rules, 2015. We have discussed, original Rules related voting through electronic Means earlier here.

These rules will come into force from the date of publication of these rules in official gazette i.e.

Applicability:

The provisions of this rule shall apply in respect of the general meetings for which notices are issued on or after the dale of commencement of this rule. [Rule 20(1)]

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Posted in Chapter VII – CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

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Amendment to Meeting of Board Rules

Posted on March 24, 2015 | 1 comment

The Ministry of Corporate Affairs came with amendment to the Companies (Meeting of Board and its Powers) Rules 2014. These amendments shall come into effect from date of their publication in the Official Gazette i.e.

Power of Board:

As we have discussed earlier here, in addition to the powers specified under sub-section (3) of section 179 of the Act, the certain powers shall also be exercised by the Board of Directors only by means of resolutions passed at meetings of the Board.

Through this amendment, ministry of corporate affairs reduced list form total 9 items to only 3 items.

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Posted in Chapter XII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

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ICSI Trainer Registration

Posted on March 20, 2015 | Leave a comment

Since student life, if that was life at all, ICSI do wonder in our life. Now, it does more wonder when you try to help students. “ICSI is tech – savvy organisation with great e-governance model by providing online services” once, I was informed.

Here, I will narrate my experience with funny tone with intention of improvement. I am going public to fetch more feedback and suggestions.

I was going to registration of my firm for providing training to student. When I access “on-line service” tab and clicked for “company registration” i got this window:

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Posted in Company Secretary, CorpGov, Institute of Company Secretaries of India - ICSI, Truth of Our Time

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Professional LOGO!!

Posted on March 17, 2015 | 1 comment

Institute of Company Secretaries of India came out with Draft Guideline Guidelines for Use of Individual Logo by Company Secretaries in Practice.

Para 4 of the Draft Guidelines deals with “The Individual LOGO”. I have some observations here:

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Posted in Company Secretary, Institute of Company Secretaries of India - ICSI

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Loan and Advances to Employees

Posted on March 13, 2015 | 2 comments

Ministry of Corporate Affairs on 10th March 2015 came out with a general circular 04/2015 regarding clarification with regard to Section 185 and 186 of the Companies Act 2013 on subject of loan and advances to employees.

The ministry say in circular:

“This Ministry has received a number of references seeking clarification on the applicability of provisions of section 186 of the Companies Act, 2013 relating to grant of loans and advances by Companies to their employees.”

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Posted in Chapter XII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

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REPORT ON ANNUAL GENERAL MEETING

Posted on March 10, 2015 | 4 comments

This is new feature of Indian Corporate Law. Section 121 of the companies Act 2013 simply says that every listed public company shall prepare a report on each annual general meeting including the confirmation to the effect that the meeting was convened, held and conducted as per the provisions of this Act and the rules made there under. The company shall file with the Registrar a copy of the report within thirty days of the conclusion of the annual general meeting.

Rule 31 of the Companies (Management and Administration) Rules 2014 goes into details.

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Posted in Chapter VII – CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

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All resigned No sign

Posted on March 6, 2015 | 3 comments

This is a comical situation under soap opera script but it must have been a practical situation in India. And yes, many dealers of “company retail market” face this situation daily. Sellers want a cut off point beyond which they do not want any liability for any single moment and buyer will take charge on very next moment after the resignation of seller. This cut – off point on time scale is a possible legal defence from all past or future sins. Under Companies Act 1956, dealers has no fine tuned pressure to create such cut – off point because there was no possibility of submission of resignation by resigning directors. Filing a return of resignation of outgoing directors, under earlier law, was duty and responsibility of incumbent directors. They have to appoint at least one new director first (if not legally required two/three, in broad sense) before resigning. During those golden days, dealers usually prepare documents in such a way time to give effect of resignation was mentioned in minutes and seconds in resignation letters. Same was also true for appointment. Thereafter, within legal thirty days, dealers ensure filing of all required documents and forms with registrar of companies. Hence, all laws complied, happy ending.

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Posted in Chapter IX - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

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Journey of Schedule II in 2014

Posted on March 3, 2015 | 1 comment

Schedule II of the Companies Act, 2013 deals with provision related to “useful life to compute depreciation”. This is second schedule of this Act which was amended before it may come into force in its original form.

A Notification published in Official gazette on 31st March 2014 amended the schedule with effect from 1st April 2014. These amendments were:

  1. In Part “A” Para 3 sub – paragraphs (i) to (iii) were substituted.
  2. In Part “C” Para 5, in Item IV, in sub – item (i); clause (b) was substituted.
  3. Under heading Notes appearing after Part “C”, Paragraph 5 was omitted.

Thereafter amended Schedule came into in force with effect from 1st April 2014.

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Posted in Chapter IX - CA2013, Chapter VIII - CA2013, Companies Act 2013

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The World Remade

Posted on March 2, 2015 | Leave a comment

The world remade is a continuous phenomenon with the changing world. World changes itself every moment but in long-term it remade itself.

What is world is first and debatable question. My world is different from your world. Human world is different from animal world. For sure, creator’s world is different from all of us, the creatures.

I will define my world here, for the purpose of my discussions. My world is essentially a human world created by its original creator, the nature, and this world subsist within whole the world created by the nature.

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Posted in Truth of Our Time

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Suggestion for MCA website, “Act and Rules” Section

Posted on March 1, 2015 | 2 comments

Dear Sir,
 
I am regular user of portal of Ministry of Company Affairs. This is one government site which update regularly. I have a small suggestion. This is related to “Act and Rules” section. 
 
I find Ministry update it immediately, whenever there is any new Rules, Notification, General Circular or order issued by Ministry and send for publication of Official Gazette of India. As you aware; most of these rules, notifications and orders come into force on the date of publication in the Official Gazette and until publication in Official Gazette, copies of these rules, notifications and orders are just a piece of information, not of Law of land.
 
I would like to suggest you, when these rules, notification and order published in Official gazette, Ministry may please replace its pre – publication copies with copies published in Official Gazette. This will help stakeholders to know date of publication in official gazette as well as date from which these rules, notification and orders.
 
I understand, this may increase workload a little bit but help stakeholders a lot and improve image of Ministry also.

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Posted in Chapter I - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility, Truth of Our Time

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ICSI invites suggestions for improvement in the CS Update

Posted on February 28, 2015 | 3 comments

Recently Institute of Company Secretaries of India send a mail to all its members for feedback on daily CS updates. Here is my copy of feedback. Readers, please send your feedback if not send earlier.

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Posted in Company Secretary, Institute of Company Secretaries of India - ICSI

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General Circulars on CSR

Posted on February 27, 2015 | 2 comments

As we discussed in last post here, government bringing changes in CSR law frequently. With all these development nightmare of CSR may become tax seems to be true soon. In this post, we are discussing General Circulars issued by Government in relation to CSR during first year. There are three circulars General Circular 21/2014 dated 18th June 2014, 36/2014 dated 17th September 2014 and 01/2015 dated 3rd February 2015.

General Circular 21/2014 enumerates following rules for interpretation of CSR Schedule VII of the Companies Act 2013:

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Posted in Chapter IX - CA2013, Companies Act 2013, CSR, Governance and Responsibility

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Journey of CSR Schedule in 2014

Posted on February 24, 2015 | 6 comments

This is being said in corporate sector, the companies Act 2013 is being treated by government and corporate as CSR law. The schedule related to corporate social responsibility has been amended since its being come into force.

Original CSR Schedule read as under:

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Posted in Chapter IX - CA2013, Companies Act 2013, CSR, Governance and Responsibility

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Companies Permitted to invest (Removal of Difficulty Order2015)

Posted on February 20, 2015 | 1 comment

Ministry of Corporate Affairs issued another “the Companies (Removal of Difficulties) Order, 2015” in exercise of the powers conferred by sub-section (1) of section 470 of the Companies Act, 2013 o remove the difficulties form (a) Definition of Small Companies under Section 2(85) and (b) for that purpose also inserted forth item in sub – section (11) of Section 186.

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Posted in Chapter I - CA2013, Chapter XII - CA2013, Companies Act 2013, Governance and Responsibility

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Change in Definition of Small Company (Removal of Difficulty Order 2015)

Posted on February 17, 2015 | 1 comment

Ministry of Corporate Affairs issued another “the Companies (Removal of Difficulties) Order, 2015” in exercise of the powers conferred by sub-section (1) of section 470 of the Companies Act, 2013 to remove the difficulties form (a) Definition of Small Companies under Section 2(85) and (b) for that purpose also inserted forth item in sub – section (11) of Section 186.

As we have already discussed earlier here, original definition of small company is:

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Posted in Chapter I - CA2013, Companies Act 2013, Governance and Responsibility

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Immediate professional concern on Secretarial Audit

Posted on February 13, 2015 | 6 comments

Late CS Bipin S. Acharya used to say that Secretarial Audit will confer this professional its legitimate dues and legal recognition for secretarial audit his life mission. Recently, the Companies Act 2013 introduced secretarial audit first time in India under legal mandate. However, there is suspicious among company secretaries about its future as earlier compliance certificates became useless piece of paper. The Institute of Company Secretaries of India seems to share same apprehension and working to address all issues. However, Institute has own limitations. Presently, we have about 9500 companies covered under compulsory secretarial audit and there are about 6500 company secretaries in practice.

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Posted in Chapter XIII - CA2013, Companies Act 2013, Company Secretary, CorpGov, Governance and Responsibility, Institute of Company Secretaries of India - ICSI, Secretarial Audit

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CRITIC TO E – BOOK ISSUED BY MCA

Posted on February 10, 2015 | Leave a comment

Recently, most of union ministries issued e – books on activities and achievements in recent years. This is welcome initiative under leadership of Prime Minister Modi, if it continues for next five years of present government. Presently, these e – books highlights past performances which belongs to mostly congress tenure. The e – book issued by Ministry of Corporate Affairs has no difference.

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Posted in Book Review, CorpGov, Governance and Responsibility, Truth of Our Time